Missouri Pacific R. Co. v. Kirkpatrick, No. 64190
| Court | United States State Supreme Court of Missouri |
| Writing for the Court | GUNN |
| Citation | 652 S.W.2d 128 |
| Parties | MISSOURI PACIFIC RAILROAD COMPANY, Plaintiff-Appellant, v. James C. KIRKPATRICK and Richard King, Defendants-Respondents. |
| Docket Number | No. 64190 |
| Decision Date | 31 May 1983 |
Page 128
v.
James C. KIRKPATRICK and Richard King, Defendants-Respondents.
En Banc.
Rehearing Denied June 30, 1983.
Page 129
Michael G. Biggers, St. Louis, for plaintiff-appellant.
John Ashcroft, Atty. Gen., Bobby J. Jones, Asst. Atty. Gen., Jefferson City, for defendants-respondents.
GUNN, Judge.
Lying in the heart of this appeal is a test of the constitutional validity of § 351.600.3, RSMo Supp.1982 as it relates to domestication taxes based on a foreign corporation's property within Missouri. Plaintiff-appellant Missouri Pacific Railroad Company (MoPac) sought declaratory and injunctive relief against defendants' attempt to collect taxes allegedly owed by virtue of § 351.600.3. The trial court denied MoPac's request for relief and found that it owed taxes in the sum of $96,660 together with interest thereon.
We find that the challenged provisions of § 351.600.3 cannot pass constitutional scrutiny and unlawfully discriminate against foreign corporations. We therefore reverse the judgment.
The portion of § 351.600.3 involved and which is the cynosure of this case relates to domestication taxes on a foreign corporation's proportion of stated capital and surplus involving increases in property located within Missouri. The particular statute provides:
It shall be the duty of every foreign corporation to cause an affidavit of its president or one of its vice presidents or secretary or treasurer to be filed when requested by the secretary of state showing the proportion of the stated capital and surplus of said corporation which is represented by its property located and business transacted in this state and showing the value of the corporation's property located in the state at any time after it was authorized to transact business in this state so that it can be determined whether or not the proportion of its stated capital and surplus which is represented by its property located and business transacted in this state or the value of the corporation's property located in this state has been increased since it was authorized to transact business in this state or since its last report. In case it is shown that the proportion of the stated capital and surplus of such corporation which is represented by its property located and business transacted in this state (which shall in no event be less than the value of the corporation's property located in this state) has increased since it
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was authorized to transact business in this state or since its last report and the payment of domestication taxes or fees above the greatest amount upon which the domestication taxes or fees have heretofore been paid, it shall be required to pay domestication taxes or fees on all such increases as is required with respect to an organization tax or fee of corporations organized under or subject to this chapter when increasing its authorized shares.(Emphasis added.)
The effect of this statute is to require foreign corporations to pay an additional domestication tax or fee on the proportion of stated capital and surplus represented by an increase in property and business in Missouri. Missouri corporations are not subject to such tax or fee increase. Hence, the fourteenth amendment equal protection issue surfaces for consideration.
MoPac is a foreign corporation incorporated in Delaware in 1977. It possesses a § 351.585, RSMo 1978 certificate of authority to transact business in Missouri. At the time of its Delaware incorporation, MoPac authorized the issuance of 1,000 shares of common stock at $1.00 par value. All authorized shares were issued at the time of incorporation, and no additional shares have been authorized or issued. In March 1978, it filed its application for certificate of authority to transact business in Missouri and paid appropriate domestication and filing fees. 1 In its application, MoPac represented that its stated capital was $1,000 and that it had no surplus. Its $1,000 assets were represented by cash in a Missouri bank. On August 31, 1978, MoPac was issued its certificate of authority by defendant James C. Kirkpatrick, the Missouri Secretary of State.
On September 1, 1977, MoPac entered into a joint merger agreement with the Missouri corporation known as Missouri Pacific Railroad Company (MoPac-Missouri) 2 and seven other railroads, some of which were Missouri corporations and some of which were not. The result of the agreement was to merge and consolidate all the corporations into MoPac, the Delaware corporation, as the survivor. The Interstate Commerce Commission approved the plan and agreement of merger subject to certain conditions.
Articles of merger were filed with the Missouri Secretary of State and a certificate of merger was issued and, ultimately, an amended certificate of authority of a foreign corporation given to MoPac, the surviving corporation.
The consequence of the merger was that the domestic corporation, MoPac-Missouri, along with the seven other railroads, became part of the plaintiff in this case, MoPac, the Delaware corporation.
As of December 31, 1976, prior to the merger, MoPac-Missouri had approximately $1,729,902,000 in total assets and approximately $999,291,000 in operating revenues. On that same date, the other seven railroads had total assets of approximately $49,063,000 and total operating revenues of approximately $14,377,000. Total mainline track mileage of MoPac-Missouri was approximately 11,786 miles, and the total mainline trackage of the other seven railroads was approximately 528 miles.
MoPac, the surviving Delaware corporation and plaintiff in this case, is presently engaged in the business of operating a railroad. It operates approximately 11,500 miles of mainline trackage in Missouri, Nebraska, Colorado, Kansas, Illinois, Oklahoma, Arkansas, Mississippi, Louisiana, Tennessee, Texas and New Mexico. Its records indicate at the time of the merger and consolidation it had 1,379 miles of mainline railroad trackage in Missouri, 1,340 miles of which were initially placed in Missouri before November 21, 1943.
On December 31, 1980, defendant Secretary of State Kirkpatrick sent a demand letter to MoPac indicating that taxes of $96,660 were due and owing to the state
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under § 351.600. This amount is based on Secretary of State Kirkpatrick's calculations of additional domestication tax owed by MoPac as of December 31, 1980, pursuant to § 351.600.3 and its 1980 foreign corporation affidavit. The affidavit showed that there had been no change in the $1,000 stated capital since MoPac's formation but that there had been a substantial increase in its property located in this state. MoPac...To continue reading
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School Dist. of Riverview Gardens v. St. Louis County, No. 73625
...by a vote of the County rather than of all the individual cities. Id. On the other hand in Missouri Pacific Ry. Co. v. Kirkpatrick, 652 S.W.2d 128 (Mo. banc 1983), the Court found "invidious discrimination" in a domestication or extra tax on the capital and surplus of a foreign co......
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Pipe Fabricators, Inc. v. Director of Revenue, No. 64326
...the test is whether a difference in classifications amounts to invidious discrimination. Missouri Pacific Railroad Co. v. Kirkpatrick, 652 S.W.2d 128 (Mo. banc 1983); Bopp v. Spainhower, 519 S.W.2d at Whereas Bates and Barhorst v. City of St. Louis, 423 S.W.2d 843, 846 (Mo. banc 1967) hold ......
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State ex rel. Classics Tavern Co., Inc. v. McMahon, No. 56232
...burden on only one tenant, is unrelated to the achievement of the object of the law. Missouri Pacific Railroad Company v. Kirkpatrick, 652 S.W.2d 128, 132 (Mo. banc 1983). The result, as applied to Classics, amounts to invidious discrimination. Bopp v. Spainhower, 519 S.W.2d 281, 289 (Mo. b......
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School Dist. of Riverview Gardens v. St. Louis County, No. 73625
...by a vote of the County rather than of all the individual cities. Id. On the other hand in Missouri Pacific Ry. Co. v. Kirkpatrick, 652 S.W.2d 128 (Mo. banc 1983), the Court found "invidious discrimination" in a domestication or extra tax on the capital and surplus of a foreign co......
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Pipe Fabricators, Inc. v. Director of Revenue, No. 64326
...the test is whether a difference in classifications amounts to invidious discrimination. Missouri Pacific Railroad Co. v. Kirkpatrick, 652 S.W.2d 128 (Mo. banc 1983); Bopp v. Spainhower, 519 S.W.2d at Whereas Bates and Barhorst v. City of St. Louis, 423 S.W.2d 843, 846 (Mo. banc 1967) hold ......
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State ex rel. Classics Tavern Co., Inc. v. McMahon, No. 56232
...burden on only one tenant, is unrelated to the achievement of the object of the law. Missouri Pacific Railroad Company v. Kirkpatrick, 652 S.W.2d 128, 132 (Mo. banc 1983). The result, as applied to Classics, amounts to invidious discrimination. Bopp v. Spainhower, 519 S.W.2d 281, 289 (Mo. b......